Reflecting the general consensus that it’s currently too expensive to run online radio services, Last.fm has announced that it is withdrawing Radio in almost all countries, and making it a subscription feature in the US, UK and Germany. (UPDATE: Web-based radio listening will remain free in those three countries, but desktop-based listening is becoming paid-for, as it already is in mobile apps).

In addition to those three countries, paid-for Radio will continue to be available in Canada, Australia, New Zealand, Ireland and Brazil, but all other countries will no longer be able to access the feature from 15 January 2013.

Last.fm says that the latest cutbacks are “due to licensing restrictions” and “in response to various factors that affect our business differently in parts of the world.” We’ve contacted the company to ask them to elaborate on this.

Paying subscribers in countries where Radio will no longer be available will still get access to ad-free browsing on the Last.fm website, access to demos on the service’s Playground, and “other features” that Last.fm says it is working hard to add. Those are fringe benefits compared to the radio feature though, and it’s hard to believe that many will continue paying. That said, Last.fm’s real value as a company has always been its mass of collected listening data rather than the services it directly offers to consumers.